Rambus Reports Second Quarter Earnings

Earnings per share of 5 cents;
Revenue growth of 14% over the second quarter last year

LOS ALTOS, California, United States - 7/14/2005   Rambus Inc. (Nasdaq: RMBS), one of the world’s premier technology licensing companies specializing in high-speed chip interfaces, today reported financial results for the second quarter of 2005. Earnings per share for the quarter were 5 cents, compared to 8 cents in the second quarter last year and 4 cents in the previous quarter. Net income for the second quarter was $5.4 million (13% of revenue), compared to $8.3 million in the second quarter last year and $4.4 million in the previous quarter. Revenues for the second quarter were $40.0 million, up 14% over the second quarter last year and up 1% from the previous quarter.

“We are pleased to report record revenues for the second consecutive quarter. The second half of the year is a challenge to forecast given the number of patent license agreements and renewals we are currently negotiating. We remain committed to signing agreements that generate long-term value,” said Harold Hughes, Chief Executive Officer at Rambus. “We have taken important and necessary actions to protect our intellectual property while we work on patent license renewals. We are very encouraged by the growing interest we are seeing in our advanced high-speed interface designs, particularly in our XDRtm memory interface as well as the momentum we are seeing with our PCI Express solutions.”

Second quarter results reflected $5.4 million in contract revenues, up 1% over the second quarter last year and down 18% from the previous quarter. This sequential decline in contract revenue was a result of less revenue from contracts for XDR memory interfaces and FlexIOtm as we near the completion of initial contracts associated with the cell processor and XDR DRAM. Second quarter results include $34.6 million in royalties, up 17% over the second quarter last year and up 5% from the previous quarter. The increase in royalties primarily reflects an increase in SDRAM and DDR royalties relative to both periods.

Total costs and expenses were $34.4 million compared with $24.4 million in the second quarter last year and $34.7 million last quarter. $5.2 million of the increase over the second quarter of last year was due to litigation expense. The remaining increases were primarily related to increased costs in engineering and administration.

The tax rate for the second quarter is 40.6% which is up from 37% in the first quarter due to a forecasted tax rate for 2005 of 39%. The two primary drivers of this increase in the tax rate are our forecast for earnings before income tax and stock-based compensation expense which is not deductible for income tax purposes.

Cash, cash equivalents and marketable securities increased from $460 million to $471 million since March 31, 2005. The increase in cash was primarily attributable to cash generated by operations.

The earnings announcement call will be broadcast live on our website (www.rambus.com) at 2:00 p.m. PDT today. To experience the audio of the Q2 Webcast, you need sound capabilities on your personal computer and installation of RealPlayer or Windows Media Player. These features are available at no cost.

The conference call replay number is 888-203-1112 and the ID number is 5462558. For international callers, the number is 719-457-0820. The replay will be available on our website beginning at 5:00 p.m. PDT today.

About Rambus

Rambus is one of the world’s premier technology licensing companies specializing in the invention and design of high-speed chip interfaces. Since its founding in 1990, the company’s innovations, breakthrough technologies and integration expertise have helped industry-leading chip and system companies solve their most challenging and complex I/O problems and bring their products to market. Rambus’s interface solutions can be found in numerous computing, consumer, and communications products and applications. Rambus is headquartered in Los Altos, Calif., with regional offices in Bangalore, India, Chapel Hill, North Carolina, Taipei, Taiwan and Tokyo, Japan. Additional information is available at www.rambus.com.
 
Rambus Inc.
Condensed
Consolidated Statements Of Operations
(in thousands, except per share amounts)
(unaudited)


Rambus Inc.
Condensed
Consolidated Balance Sheets
(in thousands)
(unaudited)